A new white paper analyzing spending trends for games, DLC, microtransactions, and subscriptions has revealed how gamers will spend this year and identified an interesting outsized influence among North American and European players. Despite these two groups representing only 20% of the total global player base, they account for almost half of global game spending. In total, North Americans spend $52.7 billion, and European players spend $33.1 billion annually.
The report, published by gaming monetization platform Tebex and video game industry market intelligence firm Newzoo, totaled the expenditures of PC, console, and mobile players worldwide to provide insights into the rise of gaming spending.
Based on the data collected from consumer spending on physical and digital gaming titles, the report projects that the global games market will reach $188.9 billion in revenue by the end of 2025, with North America and Europe accounting for 46% percent of that total.
This projection for 2025 indicates a 3.4% year-over-year increase in total global gaming spending, with North America expected to see a 4.2% increase and a 3.6% increase in Europe.
Newzoo notes that this revenue data has specific exclusions, like advertising dollars, taxes, and transactions in second-hand markets. The data also excludes certain B2B services and the betting and online gambling side of the games industry.
According to the report, North America is the leading region in the world for video game purchases, with the average gamer spending approximately $325 per year. These insights line up with other data points reported this year. In July, Mat Piscatella, senior director at market research firm Circana, reported that U.S. video game subscription spending reached an all-time high in May, following three consecutive months of growth.
Just what explains current game spending trends? One insight Piscatella mentions, also present in the Newzoo x Tebex report, is that value-driven in-game purchases are boosting revenue across different gaming platforms.
PC Players in North America do 50% of their spending in-game, along with 48% of console players. Mobile game players spend 99% of their gaming dollars on in-game purchase items like battle pass subscriptions, cosmetics, and other micro-transactions. It seems that players are also increasingly spending more on content or services separate from access to a full game copy.
In Europe, the share of in-game transactions is even higher for PC and console players, with rates similar to those for mobile games among those of North American players. However, European gamers spend almost three times less on average than their North American counterparts.
These are insights that big players in the video game industry seem to have already taken notice of. Microsoft continues to double down on its profitable Game Pass subscription service, a product whose efficacy has been doubted by some over the years. In July, The Verge reported that Microsoft CEO Satya Nadella revealed on a Q4 earnings call that Xbox Game Pass Revenue set a new record, nearly reaching $5 billion for the first time in 2024.
It seems like the gaming landscape will continue to shift toward in-game purchases and micro-transaction monetization strategies, which have led to an increase in spending as players resist $70 and $80 price tags for full-priced gaming experiences.
How much do you spend per year on video games? Do you come close to the projected North American average of $325 per year?